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Topics: Earned Value Management
EVA on a Fixed Price Contract
I'm developing EVA metrics for my company, and specifically doing so for a FP contract to which I'm assigned. I've determined formulas for my planned, actual, and forecast hours / fees / expenses. I have these values based on bill rate (values used to determine total SOW amounts) as well as standard costs. Its the standard costs that I'm really chasing.

That context being said, should my EAC be cost, or price based?
My BAC is price based, as its a fixed price contract and price is the basis for which the total amount will be paid, but how does cost versus price affect EAC? Currently, my EAC is based on Actual Costs + Remaining Costs, but I've had another resource cause doubt as to whether this is correct, since the EAC compared to BAC gives me a Cost Variance that appears to be comparing apples to oranges, a BAC based on price but EAC based on costs.

I hope this question and context was clear. Any feedback would be greatly appreciated!
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Charles -

I'd focus on costs (planned/actual) internally rather than the price being charged to the customer.

When you are working towards a fixed price milestone, you can determine the cost estimate for achieving that milestone and compare it against the budgeted cost for achieving that milestone to determine how far off the target profit mark you were.

The same is true for the overall project - do your EVA calculations based on cost and then compare your EAC calculations to the contract value to determine how much/little profit you stand to make.
Charles, agree with Kiron, look at the cost, because you want control them.

Even putting the fixprice to BAC I would object, price includes your profit, management reserves, contingencies, material and travel cost, your risk based contingencies, your level of effort work and only then your distributed budget (over the tasks you are tracking for EV). So EV is far away from PV in your case, not good to get a feeling for SPI.

Your manager might want to understand where you are in comparison to the fixed price. But as a PM you need to understand where you are in terms of progress on planned (and distributed) work.

I always tracked EV in 2 currencies: money and effort. There are interesting differences and you need to see both.

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